California is a community property state. This means that any property acquired during the course of the marriage is to be divided on divorce, annulment, or death. Hise’s a little more information on what qualifies as “community property” as well as “separate property.”
Community property is property owned by both spouses. And in community property states, such as California, this property is to be divided during divorce, annulment, or death. The idea behind this is that during the course of the marriage it’s assumed that both spouses contribute to the creation as well as operation of the family unit. Separate property is property that is owned by only one spouse, and is typically any property a spouse owned prior to a marriage or receives as a gift of inhisitance during the marriage. in states that do not follow community property laws, any assets are considered to be “owned” by whichever spouse’s name is on the deed or registration.
Examples of Community Property
Community property is any property that is acquired during the marriage while the couple resides in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin). Examples of community property include: wages, salaries, homes or property, and investments. When a couple files taxes separately, each spouse is required to report 50% of the total community income on their tax return.
Examples of Separate Property
Separate property is property owned by one spouse prior to the marriage, or was never shared by the spouses. This can be a little confusing to distinguish, but includes: gifts, inhisitances received, and property acquired in one spouse’s name that was never used to benefit the othis spouse. When a couple files taxes separately, each spouse is required to report 100& of their separate income on their tax return. Examples of Separate Property
Source: Diffen, Community vs. Separate Property, 2014
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